Halifax has a problem: not enough housing to keep people off the streets and too many empty or underused churches. Congregations need to step up and acknowledge the role they play in the housing crisis in Nova Scotia and the government needs to hold faith organizations accountable for their fiscal and social responsibilities.
Buildings are empty, yet tents are full
A dilemma facing churches in Halifax is felt across the country. Congregations are dwindling and buildings are starting to deteriorate. Churches sit empty all but Sunday morning when a few gather to worship, while the parks that surround them continue to fill with tent encampments.
St. Paul’s Anglican Church and the Cathedral Church of All Saints loom over prominent tent encampments, yet their doors are closed for all but a few hours a week. Buildings are empty, yet tents are full.
Halifax is in dire need of housing. The city announced it was short 17,000 housing units in 2022. The vacancy rate in Halifax has stayed near one per cent over the last few years, although three to five per cent is the recommendation for a healthy balanced housing market.
At the same time, Halifax saw the highest spike of residential unit rental prices across Canada between 2021 and 2022, with the average rent for a two-bedroom unit jumping 9.3 per cent.
The number of people actively homeless jumped from 690 in September 2022 to 953 in June 2023. Only three per cent of all rental units in Halifax are deeply affordable (if you make $28,000 or less per year) and only 37 per cent are affordable if you make $46,000/year. For those attempting to buy, Halifax has seen house prices rise 7.6 per cent in the last year, the highest in the country. Simultaneously, mortgage payments are ballooning with rising interest rates (variables rates have gone up nearly 49 per cent over the last year) and many owners are passing those costs down to renters.
It is the government’s responsibility to take a significant role in resolving this crisis
The government has attempted to alleviate these issues by implementing a temporary rent cap and reducing the ability of property owners to operate short-term rentals out of secondary homes. But loopholes still exist, like fixed-term leases that allow landowners to end a lease after a year and raise rents as much as they want even if the same tenants are signing again.
The government has not stepped in sufficiently to alter zoning and allow for higher density housing or to incentivize the transformation of empty and underused buildings into affordable housing. It is the government’s responsibility to take a significant role in resolving this crisis, and the religious organization tax exemption is working against its resolution.
Under the Nova Scotia Assessment Act, every church and place of worship is exempt from paying property tax. The clear goal of this act was to help support entities that serve the public good. However, religious affiliation is at an all-time low. Statistics Canada found only 68 per cent of people, 15 years and older, are affiliated with a religious organization.
The decline is even more precarious for denominations such as Anglican and United who are losing about one church every week. Churches are increasingly sitting empty, therefore, supporting very minimal social good as their finances are eaten by deteriorating buildings and rising maintenance costs.
A role of a functioning property tax program is to incentivize building owners to not let them sit empty and unused, yet these healthy economic pressures are not applied to the church.
$46.7 million in foregone property tax revenue
In 2018, religious charities in Nova Scotia reported holding land and buildings valued at more than $1.4 billion, which represents more than $46.7 million in foregone property tax revenue. The preferential tax treatment for religious organizations costs our government a significant amount of tax revenue and does not incentivize these organizations to participate in the housing market.
Research conducted in partnership between the Narrative Group and Logit Group studied Canadians’ support of tax-exempt religious institutions and found that 37 per cent support maintaining tax-exemption status while a similar proportion (35 per cent) are opposed.
The special status of religious charities in Nova Scotia tax law allows them to enjoy the benefits paid for through taxation while in recent years their social contribution is diminishing.
Realigning their mission towards spiritual growth while maximizing generosity can be a positive and enriching shift for churches
In the City of Montreal, amendments to property tax law have already been enacted. In 2015, the city began taxing churches for the proportion of the church building not being used for public worship or ministerial residence. Therefore, vacant buildings and manses must foot a property tax bill.
In Montreal’s case, the government is taxing all spaces that are currently being used for charitable work, which could negatively affect social programs already operating efficiently. However, it has led to re-evaluations by congregations about how to pursue their goals most effectively, leading many to consolidate by selling underused church buildings. One example is Trinity Memorial Church that sold to a private developer within two months of the new tax policy being enacted.
Similarly, a new bylaw came into effect in Iqaluit whereby churches will no longer be fully tax-exempt. These amendments have created accountability for churches to either efficiently use their space or sell.
For many communities of faith, relinquishing a tight grip on the physical walls of their buildings and realigning their mission towards spiritual growth, while maximizing generosity, can be a positive and enriching shift. This would create new opportunities for the housing market supply to grow because property taxes would be collected and the properties previously empty would be fully utilized, doing good for society.
In Halifax, money and property can become less scarce if we optimize the resources already available to us. Providing special tax exemptions to religious organizations disincentivizes efficient use of space, a precious commodity in the current housing crisis.
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